The layoffs had been signaled earlier this month in a letter from the hospital’s interim administrator Dr. Erik Steele, who assumed the post in December.

“Decisions like this are extremely difficult for everyone,” Steele said in a prepared release. “Like so many other organizations across our state and around our nation, we had no choice. These cost savings are essential so that we can continue to provide quality care for peninsula residents.”

Steele also stressed that the staffing reductions will not affect access to providers, or the high quality of care people expect from Blue Hill Memorial Hospital.

The hospital already had instituted cost saving measures including removing former CEO Tim Garrity, eliminating the position of chief financial officer, instituting a hiring freeze, and banning unnecessary travel.

The layoffs affect approximately 5 percent of the hospital’s staff. Currently the hospital is exploring additional cost savings measures, as well as looking for ways to grow services such as orthopedics and gynecologic surgery. Overall, the workforce reduction and cost savings are expected to improve cash flow by $250,000 a month.

Employees whose positions were eliminated are eligible for severance payments based on their years of service. Blue Hill Memorial Hospital is a member of EMHS, which is taking special steps to help the affected employees.

“We want to take care of our employees,” said Phil Johnson, EHMS vice president for human resources, “so when the need for layoffs became clear, we asked managers across the system to be prepared to assist Blue Hill staff whose positions have been eliminated, to find suitable positions elsewhere in the system.”

Blue Hill Memorial Hospital, like other small hospitals located in rural regions across Maine, faces major cash flow issues due to lagging Medicaid (MaineCare) reimbursements from the state. As of Jan. 15, the state owed Blue Hill Memorial Hospital almost $4 million.